IRIS Accountancy AP/BT/PT – When Partner leaves a Two Partner Partnership?

iris-accountancy-ap-bt-pt-when-partner-leaves-a-two-partner-partnership

IRIS Accountancy AP/BT/PT – When Partner leaves a Two Partner Partnership?

9th March 2026

Any trade which changes from ‘Partnership type’ to a ‘Sole trade type’ business as it affects Accounts Production/Business Tax/Personal tax please read below :

In this scenario the Partnership is deemed to cease. BT assumes this and treats the Partnership as Ceasing. However, AP does not. It is important that you enter the Cessation date (And the TO date for the individual Partner who left) in the Partnership record. Accounts should be prepared accordingly. Please refer to https://www.gov.uk/hmrc-internal-manuals/partnership-manual/pm134200

If one or both partners continue to trade but separately a sole trade record should be set up and accounts prepared accordingly.

This example from is taken from the HMRC manual linked above: If a partnership is made of two partners, Simon and Barbara, and Barbara terminates the partnership to pursue a different career. Simon will then cease to be part of a partnership but instead another entity will form, such as a sole trader, based on the facts. Until another person joins Simon as a partner, the partnership is dissolved. A year later Brenda and Simon come together and form a partnership, but in the meantime no partnership existed.

In summary:

1. Ensure you have entered a CEASED DATE for the Partnership and a TO DATE for the leaving person in the IRIS software. The partnership has effectively ended
2. Any trade after the Ceased date and TO date should be a new separate trade and set of accounts for the client as a new sole trader business. Do not add further data/periods after the ceased date etc.
3. NOTE: If you have already created a continuation of sole trader periods (as in not completed step 2) and have already posted sole trade profit etc data into AP/BT/PT, then please delete these postings from AP/BT/PT and add them under the new sole trader business.